What Unpaid Internships Say About Your Company

With the arrival of Spring, the quest for a resume-burnishing internship moves into high gear for many college students. A high proportion of those interns will work for free.

Obviously that’s not ideal for the interns, and, as The New York Times reports, it’s also a matter of concern to the US Department of Labor. DOL Solicitor Patricia Smith suspects that too many employers take advantage of students’ hunger for experience to avoid making paid hires. Newsweekly Time also notes a rise of non-traditional internships (among post-graduates changing careers), which it casts in the stark terms of supply and demand.

As an employer, how should you size up the situation? My research suggests that, even if you think you’re acting responsibly, you may not be seeing the whole picture. You may think your unpaid internship program says good things about you: that you’re willing to mentor, that you’re a canny test-driver of talent, and that you’re cost-conscious. At the very least, with so many young people willing to work for no pay, parents willing to support them, and schools willing to grant academic credit for the experience, you may think you’re within your rights.

But to the outside world, your internship program might say some very different things about you:

You’re penny wise and pound foolish. Internships are stopgap measures for many organizations, a way to plug operational holes. But when inexperienced, short-term employees are asked to perform operationally vital work, the result can be more cost than benefit. Consider the widespread use of interns to manage web content and social media initiatives. It may seem inspired given the generational fit, but it delays the hour when your full-timers have to learn the new tools of their trade, and puts people who know and care least about your brand on the front lines of communicating it.

You’re exploitative. Particularly in a down economy, the appeal of cheap, flexible labor is obvious — and some will assume that is your real goal. Confirm that suspicion in any way and word will get out. That’s what A. Brown-Olmstead Associates, an Atlanta public relations firm, discovered when it billed clients for hours worked by unpaid interns. Most interns don’t gripe aloud because they count on good references from their internship supervisors. But the ones who leave silently embittered let their networks know. You failed to provide them with learning opportunities, you failed to help them pad their rolodex, and yes, you had them stationed half the time at the copy machine or the coffee maker. Or perhaps you did give them substantive work — in which case, not receiving wages for that work was all the more galling. In the midst of today’s outcry over executive pay, they find especially sympathetic ears. How, people wonder, as the salaries and bonuses of the top people climb into the stratosphere, can there be people in the same organization working for nothing?

You’re elitist. When internships are unpaid or underpaid, they send a message that the employer prefers the offspring of the well-to-do. Who else can afford to do months of unpaid work, often in expensive urban locations? Compounding the problem is that so many internships come about through the favor system, with positions being found for the young relatives of business partners eager to see them make their way in the world. Since internship programs are part of most organizations’ recruiting processes, this filters out a diverse crop of talented people at the earliest stage of the pipeline.

You’re courting a lawsuit. Any HR professional should be aware of the Department of Labor’s six-point test for exempting internship and trainee situations from minimum wage and employee protections. As the Times article notes, there’s a widely-held assumption among employers that, if a student’s school is issuing academic credit for the internship, it’s legal. Not true: Just because a college is not being discerning about how it issues credit doesn’t mean you pass the test.

Your internship program doesn’t have to say bad things about you. A way to make sure it doesn’t is to pay your interns a decent wage. Full stop. But even unpaid programs — and occasionally there’s a case to be made for them, if they mean that more opportunities are created — can shine, if they’re designed to provide valuable experience and serious mentoring. A two-month job that maps to a two-month project, for example, serves everyone better than a random assignment to pitch in as some department limps through vacation season.

Your human resources department knows how to craft positions that add value on both sides of the equation — it does this every day with the full-time roles needed to make the business successful. Devote the same level of reflection to your internship roles, and they can reflect well on you.

Ross Perlin is at work on a book on the internship phenomenon. A former unpaid intern himself, he is now gainfully employed by the Himalayan Languages Project in southwest China.

oss Perlin is at work on a book on the internship phenomenon. A former unpaid intern himself, he is now gainfully employed by the Himalayan Languages Project in southwest China.